Conversation Starters: Chapter 2 moves into the process of how the money used to make a product actually gets tracked and how the cost per unit of product is calculated! It follows these manufacturing costs using a costing system called "Job Order Costing". It also discusses how indirect manufacturing costs, manufacturing overhead, get added to the cost of products. What are the three inventory accounts used to record manufacturing cost? In what order are these accounts used? To what "family" do inventory accounts belong - asset, liability, equity, revenue or expense? On what financial statement are they reported? . At what point do manufacuring costs leave the last inventory account and into what account are they moved? On what financial statement this account reported? How is the predetermined overhead rate calculated? Is it based on actual or estimated amounts? How is manufacturing overhead applied to products? Is it based on actual or estimated amounts